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The 2015 European Refugee Crisis and Residential Housing Rents in Germany

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  • Kathleen Kürschner
  • Michael Kvasnicka

Abstract

This paper studies the impact at county level of the mass arrival of refugees in 2015 on residential housing rents in Germany. Using unique and novel data for 2014 and 2015 on end of year (EoY) county-level refugee populations and their type of accommodation as well as on monthly individual offers of flats for rent from Germany’s leading online property broker, we find strong evidence for a negative effect of refugee immigration on rental prices for residential housing in Germany. An increase in the county-level EoY refugee share by one percentage point is associated with a lower average rental price of 0.57% in the period October to December 2015, and a lower average rental price of 0.97% in January to March 2016. Additional evidence suggests that this negative price effect may have been facilitated by increases in the share of refugees in decentralized accommodation. IV regressions that exploit for identification variation in intra-state distances between counties that house refugee reception centers and surrounding counties produce even stronger negative price effects. Our finding of a negative price effect is at odds with the majority of studies which have investigated the consequences of immigration for local property markets at the county or city level. These diverging results may reflect differences in natives’ perceptions of potential adverse externalities associated with refugee migration, differences of seemingly sufficient magnitude to successfully counteract and outweigh any positive demand-side driven stimulus of immigration for higher rental prices.

Suggested Citation

  • Kathleen Kürschner & Michael Kvasnicka, 2018. "The 2015 European Refugee Crisis and Residential Housing Rents in Germany," ERES eres2018_156, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2018_156
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    Cited by:

    1. Breidenbach Philipp & Schaffner Sandra, 2020. "Real estate data for Germany (RWI-GEO-RED)," German Economic Review, De Gruyter, vol. 21(3), pages 401-416, September.
    2. Eren Aydin & Kathleen Kürschner Rauck, 2023. "Low-emission zones, modes of transport and house prices: evidence from Berlin’s commuter belt," Transportation, Springer, vol. 50(5), pages 1847-1895, October.
    3. Albarosa, Emanuele & Elsner, Benjamin, 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," IZA Discussion Papers 15850, IZA Network @ LISER.
    4. Prömel, Christopher, 2021. "Belonging or estrangement: The European refugee crisis and its effects on immigrant identity," Discussion Papers 2021/16, Free University Berlin, School of Business & Economics.
    5. Christopher Prömel, 2022. "Belonging or Estrangement – The European Refugee Crisis and Its Effects on Immigrant Identity," SOEPpapers on Multidisciplinary Panel Data Research 1160, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Hennig, Jakob, 2021. "Neighborhood quality and opposition to immigration: Evidence from German refugee shelters," Journal of Development Economics, Elsevier, vol. 150(C).
    7. Umut Unal & Bernd Hayo & Isil Erol, 2022. "The Effect of Immigration on the German Housing Market," MAGKS Papers on Economics 202238, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Heinemann, Friedrich & Janeba, Eckhard & Todtenhaupt, Maximilian, 2022. "Incumbency and expectations of fiscal rule compliance: Evidence from surveys of German policy makers," European Journal of Political Economy, Elsevier, vol. 72(C).
    9. Bredtmann, Julia, 2022. "Immigration and electoral outcomes: Evidence from the 2015 refugee inflow to Germany," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    10. Emanuele Albarosa & Benjamin Elsner, 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1183, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Albarosa, E. & Elsner, B., 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," World Development, Elsevier, vol. 167(C).
    12. Felix Stips & Krisztina Kis-Katos, 2020. "The impact of co-national networks on asylum seekers’ employment: Quasi-experimental evidence from Germany," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-22, August.
    13. Giesselmann, Marco & Brady, David & Naujoks, Tabea, 2021. "The social consequences of the increase in refugees to Germany 2015-2016," Discussion Papers, Research Professorship Inequality and Social Policy SP I 2021-502, WZB Berlin Social Science Center.
    14. Deole, Sumit S. & Huang, Yue, 2020. "How do new immigration flows affect existing immigrants? Evidence from the refugee crisis in Germany," GLO Discussion Paper Series 579, Global Labor Organization (GLO).
    15. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    16. Albarosa,Emanuele & Elsner,Benjamin, 2022. "Forced Migration, Social Cohesion and Conflict: The 2015 Refugee Inflow in Germany," Policy Research Working Paper Series 9913, The World Bank.

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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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